ISMA cuts out shortages of supply for the upcoming season

Thanks to a sufficient buffer and improved production prospects in Uttar Pradesh, Maharashtra, and Karnataka, there won’t be a shortage of sugar during the upcoming season (October to September), the India Sugar Mills Association (ISMA) declared on Wednesday.

According to ISMA President Aditya Jhunjhunwala, there will be a carryover stock of 5.5 million tonne (MT) on October 1 of the following season (2023–24), and with its earlier estimate of 31.7 MT of sweetener production, excluding diversion of 4.4 MT to ethanol, against annual consumption of roughly 28 MT, it would be sufficient to meet the domestic demand.

The ISMA forecast last month that output in the 2023–24 season (October–September) is anticipated to be about 31.7 MT, a decrease from the 3.4% of the current season. The ISMA projection had been deemed “too premature” by the food ministry.

The ISMA advised the government to develop a long-term ethanol pricing policy that would take into account a fair and lucrative price as well as a minimum sales price, as these policies are expected to encourage investment in expanding ethanol production capacity.

Currently, the government has a committee that makes decisions about the price of ethanol before the start of the sugar season. “The industry and banks will not be able to put additional investment without the proper return,” Jhujhunwala warned. In order to increase output from its current level of 5,500 million litres to 12,000 million litres by the end of FY26 in order to achieve the 20% blending objective, the ISMA has calculated that an investment of Rs 17,500 crore will be required.

The ISMA reports that ethanol mixing in petrol has increased significantly from 2019–20, from roughly 5% to about 11.76% now. According to the 2018 national biofuels policy, the government moved up the deadline for blending 20% ethanol into petrol from 2030 to 2025–2026.

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